Regulators have put an end to the three-way fight for ownership over hundreds of millions of dollars’ worth of Robinhood shares.
In a Delaware bankruptcy court on Wednesday, the U.S. Department of Justice confiscated $450 million worth of Robinhood shares from FTX, reported Decrypt on Wednesday.
The New York court ordered federal authorities to seize the assets as part of the ongoing criminal case against former FTX CEO Sam Bankman-Fried.
“And for the court’s benefit, we will file a notice of seizure so that the court is aware and has something in the docket that shows what’s actually been seized by the U.S. government. So that if we don’t end up resolving it there, it’ll be clear for purposes of litigation what is actually in the government’s possession,” said U.S. Attorney Seth Shapiro.
Last month, Bankman-Fried laid claim to the shares, saying that himself and fellow FTX co-founder Gary Wang had borrowed $546 million from Alameda to acquire a 7.6% stake in Robinhood.
Bankman-Fried and Wang purchased these shares through a shell corporation called Emergent Fidelity Technologies. At the time of the purchase, the 56 million Robinhood shares were valued at $648 million.
Bankrupt crypto lender BlockFi also sought the rights to these shares, claiming they were pledged as collateral against a loan from Alameda Research – a deal that was reportedly agreed to in November.
FTX’s liquidators, led by John Ray III, moved to revoke any external claims over the Robinhood shares. In a motion filed on Dec. 22, the legal representatives of FTX’s bankruptcy said that any court actions filed by competing stakeholders should be disregarded because FTX is the only firm that has a “colorable” claim to ownership.